Refer to the information provided in Figure 9.3 below to answer the questions that follow. Figure 9.3
-Refer to Figure 9.3. In the short run this firm should ________ and in the long run this firm should ________, if economic conditions do not change.
A) shut down; exit the industry
B) exit the industry; shut down
C) continue to produce where MC = MR; expand
D) continue to produce where MC = MR; shut down

Question

Refer to the information provided in Figure 9.3 below to answer the questions that follow.  Figure 9.3
-Refer to Figure 9.3. In the short run this firm should ________ and in the long run this firm should ________, if economic conditions do not change.
A) shut down; exit the industry 
B) exit the industry; shut down 
C) continue to produce where MC = MR; expand 
D) continue to produce where MC = MR; shut down

Quizplus · Accepted Answer

In the short run, if the firm is unable to cover its variable costs, it should shut down. In the long run, if it cannot cover its total costs, it should exit the industry.

Refer to the Information Provided in Figure 9